Business

Canada's GDP expanded by 4.6% in the year up to May, strongest pace in 17 years

Canada's economy grew by 0.6 per cent in May, the seventh straight monthly gain.

Oil and gas and manufacturing grew, while construction and real estate shrank

Canada's economy grew by almost 5 per cent in the 12 months up to May, Statistics Canada reported Friday. (Dave Chidley/Canadian Press)

Canada's economy grew by 0.6 per cent in May, the seventh straight monthly gain.

The overall economy has grown by 4.6 per cent in the 12 months leading up to the end of May, Statistics Canada said. That's the biggest 12-month figure since 2000.

The strong showing blew past what economists were expecting, which was modest growth of 0.2 per cent for the month.

Goods-producing industries outpaced the service sector, with the former expanding by 1.6 per cent, and the latter eking out a 0.2 per cent gain.

Oil and gas extraction grew by 7.6 per cent, while manufacturing grew by 1.1 per cent.

"The big surprise was a massive 13 per cent snapback in ... oilsands, which alone accounted for half of the rise in GDP," Bank of Montreal economist Doug Porter said.

Oil output looks especially strong on an annualized basis, since in May of 2016, the Alberta oilsands were hit hard by a massive and devastating wildfire. It's also bouncing back from earlier this year, when a major Syncrude upgrader was knocked offline by a fire.

Construction declined by 0.6 per cent, as a strike in the last week of the month affected unionized construction workers in Quebec. 

Real estate, rental and leasing shrank by 0.2 per cent.

"There appears to be no holding back the Canadian economy, at least for now," TD Bank economist Brian DePratto said. "The robustness of the Canadian economy will likely allow the Bank of Canada to carry through with another interest rate increase this fall, completing the removal of the 2015 emergency stimulus."

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